On May 25, the Washington State Legislature adjourned its 2011 Legislative Session; one month overdue. An imperative of the AIA|WA this session was to protect the capital construction budget.
Leading up to the Session
Recently, the Washington legislature has shifted more than one billion dollars away from the construction budget. It also steeply cut design funding under the guise of promoting “shovel ready” projects. Shovel ready is burying architects.
Consequently, the AIA|WA funded groundbreaking study of the public design and construction budget. The study, conducted by Hebert Research, found that every billion dollars spent on construction creates 1,000 more jobs and $55 million more in wages than the same amount in the general government budget. View the study at www.aiawa.org.
Armed with new information, AIA|WA set out to demonstrate the importance of design and construction spending. AIA|WA shared the study results with lawmakers and the press. Using guest editorials and letters to the editor, the results were broadcast statewide.
AIA|WA members helped spread the message. During the AIA|WA annual lobby day, architects from across Washington delivered giant pencils to every lawmaker. The pencils were inscribed with a message: Pencil Ready Creates Shovel Ready Jobs.
Capital Construction Budget
Entering the session, the poor economy almost eliminated Washington’s ability to sell bonds. State revenue had plummeted. The Washington Constitution limits bond sales and interest payments to 9% of the averaged state revenue. When the state revenue dropped, the allocated 9% maximum fell too; suddenly the state was close to its bond sales limit.
Nearly half of the state’s capital budget comes from bond sales; funding for building design and construction comes mainly from that half. If the state was not able to sell more bonds, architects were in trouble. However, the legislature decided to adjust what was considered “income” in the revenue calculation. By shifting funds, more bond capacity was created; momentarily design funding levels were stable.
Midway through the session another threat arose in the form of a constitutional amendment, Senate Joint Resolution 8215 (SJR 8215). The amendment would freeze the state’s bond sales at recessionary levels. SJR 8215 would have cut design/construction funding by nearly $7 billion dollars over ten years.
Stan Bowman, Hon. AIA|WA, the AIA|WA Executive Director worked with key lawmakers, such as Capital Budget Committee Chair Rep. Hans Dunshee, Hon. AIA|WA, and stopped SJR 8215. But politics kept the bond argument going. In the end, budget negotiators compromised with Substitute Senate Bill 5181 (SSB 5181).
SSB 5181 will gradually lower the state’s working debt limit to 7.75% by 2021. SSB 5181 also creates a Blue Ribbon Commission to examine state debt practices and make recommendations. The AIA|WA is very concerned about shackling the state to a lower bond sales limit. But, initial reductions don’t start until 2015; so, the legislature has four years to find a better approach.
Once agreement was reached with SSB 5181 budgets were completed quickly. The resulting capital budget is roughly $2.8 billion, including $1.1 billion in bond sales. Unfortunately, the final operating budget still takes over $450 million from the capital budget in the next two years. This is better than the billion dollars taken out previously, but it’s still problematic.
Next Steps
The AIA|WA is talking with other stakeholders to prepare for the commission. The AIA|WA will ensure that all commission participants are educated on the importance of the state’s use of bonds for design and construction projects. The AIA|WA will also spend the interim between sessions talking to lawmakers; there is concern that some legislators have already made up their minds. However, the AIA|WA was successful in educating lawmakers this session and continue that effort in the forthcoming year.
Leading up to the Session
Recently, the Washington legislature has shifted more than one billion dollars away from the construction budget. It also steeply cut design funding under the guise of promoting “shovel ready” projects. Shovel ready is burying architects.
Consequently, the AIA|WA funded groundbreaking study of the public design and construction budget. The study, conducted by Hebert Research, found that every billion dollars spent on construction creates 1,000 more jobs and $55 million more in wages than the same amount in the general government budget. View the study at www.aiawa.org.
Armed with new information, AIA|WA set out to demonstrate the importance of design and construction spending. AIA|WA shared the study results with lawmakers and the press. Using guest editorials and letters to the editor, the results were broadcast statewide.
AIA|WA members helped spread the message. During the AIA|WA annual lobby day, architects from across Washington delivered giant pencils to every lawmaker. The pencils were inscribed with a message: Pencil Ready Creates Shovel Ready Jobs.
Capital Construction Budget
Entering the session, the poor economy almost eliminated Washington’s ability to sell bonds. State revenue had plummeted. The Washington Constitution limits bond sales and interest payments to 9% of the averaged state revenue. When the state revenue dropped, the allocated 9% maximum fell too; suddenly the state was close to its bond sales limit.
“The state budget deficit was the backdrop for the 2011 legislative session. This made all other issues very difficult to address.”- Peter Rasmussen, FAIA, AIA|WA President
Nearly half of the state’s capital budget comes from bond sales; funding for building design and construction comes mainly from that half. If the state was not able to sell more bonds, architects were in trouble. However, the legislature decided to adjust what was considered “income” in the revenue calculation. By shifting funds, more bond capacity was created; momentarily design funding levels were stable.
Midway through the session another threat arose in the form of a constitutional amendment, Senate Joint Resolution 8215 (SJR 8215). The amendment would freeze the state’s bond sales at recessionary levels. SJR 8215 would have cut design/construction funding by nearly $7 billion dollars over ten years.
Stan Bowman, Hon. AIA|WA, the AIA|WA Executive Director worked with key lawmakers, such as Capital Budget Committee Chair Rep. Hans Dunshee, Hon. AIA|WA, and stopped SJR 8215. But politics kept the bond argument going. In the end, budget negotiators compromised with Substitute Senate Bill 5181 (SSB 5181).
“We dodged a bullet by avoiding a constitutional reduction in the capital budget thanks to Stan’s skillful lobbying. We are indeed being served well by Stan and our staff in Olympia. However, I suspect this issue will come back.”- Peter Rasmussen, FAIA, AIA|WA President
SSB 5181 will gradually lower the state’s working debt limit to 7.75% by 2021. SSB 5181 also creates a Blue Ribbon Commission to examine state debt practices and make recommendations. The AIA|WA is very concerned about shackling the state to a lower bond sales limit. But, initial reductions don’t start until 2015; so, the legislature has four years to find a better approach.
Once agreement was reached with SSB 5181 budgets were completed quickly. The resulting capital budget is roughly $2.8 billion, including $1.1 billion in bond sales. Unfortunately, the final operating budget still takes over $450 million from the capital budget in the next two years. This is better than the billion dollars taken out previously, but it’s still problematic.
“I understand that the legislature’s budget actions turned out much better than could have been expected on the eve of what looked like near destruction for the capital budget. We all owe the AIA|WA a big thank you for its continued tenacity in representing the interests of the profession and the larger impact on the state economy. Thank you! - George Shaw, AIA, AIA Seattle President
Next Steps
The AIA|WA is talking with other stakeholders to prepare for the commission. The AIA|WA will ensure that all commission participants are educated on the importance of the state’s use of bonds for design and construction projects. The AIA|WA will also spend the interim between sessions talking to lawmakers; there is concern that some legislators have already made up their minds. However, the AIA|WA was successful in educating lawmakers this session and continue that effort in the forthcoming year.
“It is rewarding to see the positive influence that architect’s have on State policy. During the past legislative session, AIA Washington Council was effective in making the voice of the profession heard on important issues. Architects lobbied for the long term sustainability of our State’s public institutions and economic health. Our ability to engage in the political process gives us a sense of purpose in the role that architects can play in the community and the energy to continue to participate.” – Walter Schacht, AIA
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